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Halftime Business Assessment: 7 Areas to Review and Refine

Guest post by: MIchael Daley

Article Overview: Ideas for your mid year business plan review. Through this midyear business assessment, you are setting your firm up for success by taking the time to re-align financial forecasts, sales strategies, and marketing efforts with the company’s current and future strategic goals.

Halftime Business Assessment: 7 Areas to Review and Refine

In January everyone was yelling Happy New Year! Here we are, July, 2010. Can you say it's been a happy new year for your business? We are now past the half way point of the business year. How is your business doing versus the annual business plan forecasts? What? You didn't do an annual business plan! It's not too late to do a quick forecast for the next six months.

Well, for those of you that have a plan, I recommend you take some time to see how your company is doing versus your goals and financial forecasts. If you need to make revisions then get your team together and do it. In these uncertain economic times, no company should go into the second half without having an updated marketing and financial plan. This would be like an archer trying to hit the center of his target blindfolded. One benefit of a half way analysis is that developing your plan later this year for 2011, will be easier.

Now let's address those of you without a plan. What were you thinking? Yes, it takes time. But how can you move forward and grow without some direction and a roadmap on how to get to the next level? It's not too late to sit with your employees, or if you are a one person shop, sit by yourself and plot some defined objectives and actions to expand and grow. Have you tracked your expenses for the first six months? Then you should be able to do a forecast for the last half of the year. If you are a retailer, do you need to budget marketing funds in October to start a holiday campaign in November? If you are a service company, like a lawn maintenance service, that has its main business in the warm months, how are you going to get through from November until March?

I know this seems like a daunting task. Perhaps you need to hire someone to guide you through the process and develop your business strategy with you.

Now is a good time to get your staff and your employees together to review your strategic and tactical plans for the next six months. Working on the front lines day in and day out, they probably have ideas to improve the financial end of the business that you, as the owner, would never think of.

Change is inevitable, so it's important to be flexible with the business plan. Through this midyear business assessment, you are setting your firm up for success by taking the time to re-align financial forecasts, sales strategies, and marketing efforts with the company's current and future strategic goals. In December, as you look back over the year, will you be able to say "The changes we made in the summer really made a difference!"? However, if you continue to do what you are doing, you will get what you got.

No matter whether you have a plan or not, here are some items to consider when doing a mid-year review:

1. Look at What Worked

When you review your progress toward achieving the annual goals, look at the success stories in your company. How can they be refined and implemented so the success continues? Maybe a salesperson came up with a new selling proposition he/she can share. What if your sales are 20% over forecast? You can decide to reinvest a little more in marketing or another area of the business, with the full confidence that the extra expenditures are both affordable and warranted.

2. Holiday and High Traffic Times

Most businesses have cyclical or seasonal peaks and valleys. Assess when yours occur and plan accordingly. Maybe you need more cash available for an increase in inventory to support holiday sales. Based on your sales forecast and receivable collections do you need a line of credit to make the purchase? Maybe you are planning a promotion or event for Halloween. When do you send out invitations? When do you purchase decorations and how much will they cost?

3. Capital Expenditures

Look over your equipment and see if some of it needs to be replaced or updated. What maintenance needs to be performed?

4. Are You Going to Hit Your Salary Goal?

This is something overlooked by many business owners. What do you want to take home during the last six months of 2010? How will your margins support you achieving the goal? If you are ahead of pace there is no guarantee that the last six months will produce the same results. What are potential roadblocks and how will your business overcome them?

5. Incentives

If you are falling behind sales goals or want to get to the next level, now is the time to incentivize your people for a six month push. This gives them time to devise their own plans and it lets them know the carrot is dangling in front of them. Everyone likes a few extra dollars for Christmas and now is the time to get them motivated, not in November!

6. Budget Review

A detailed comparison of actual versus budgeted results for revenue and for each spending area will lead to greater insights on spending items that may have been overlooked in the budgeting process. For example, a business owner who built his year's marketing budget to cover advertising and direct mail would surely realize that he has neglected to cover trade show costs in his budget once he reviewed expenses for the first six months versus budget. But if the budget was done only for very broad categories such as Cost of Goods Sold and General & Administrative Expense, it might be possible to overlook the fact that these bills were never included in the year's budget. Generally, more detail is better in a budget.

7. Marketing

No matter how great your organization is, or the service or products you provide, unless your target market is aware of you and the benefits you offer, your chances of succeeding are not good. Have you tracked the results from each of your attempts? Do you know what is working and what is not? What will you change in your marketing plan?

Just like halftime in basketball, your business needs to assess the first half, see what worked, and make changes if necessary to improve in the second half. Don't wait until the announcer says "Two minutes! Two minutes left in the game!"

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Article Tags: business plan, business plan as a thought process, financial forecasts, incenitves, marketing plan, mjd business advice llc, sales forecast



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